Discover more from The 21 Hats Morning Report
Introducing The Spotlight
First up, Professor Egghead. And you, too, can take the opportunity to tell us about your business.
Here are today’s highlights:
A case study in pricing: Would movie-goers pay $25 if they got unlimited food?
The struggles of a big box chain show how tough retail is right now.
At what point does it make sense to bring manufacturing back to the U.S.?
How the first national, Black-owned coffee brand grew out of a garage.
THE 21 HATS READER SPOTLIGHT
I recently asked Morning Report readers to introduce themselves by sending in a photo and answering a few questions. Today, we’re publishing the first of the responses. CLICK HERE to tell us about your business.
Business: Professor Egghead Science Academy.
Location: Los Angeles, Ca.
Employees: 20 full-time equivalents.
One decision that helped you get where you are: Focusing on developing key performance indicators to drive the business forward in a clear, objective way.
If you had it to do over: I would focus on profit first, developing and maintaining high profit margins on fewer products, with well documented processes surrounding every one of those products.
On the days you enjoy most: I'm most happy and productive when I'm solving macro problems in my business to improve efficiency from the top down. A great example of this is leveraging new technologies to make it easier for my employees to get things done, with my CRM and apps across the web.
One aspect of running a business you have yet to master: Hiring and training for management positions, specifically for HR and Staffing roles.
Your most successful form of marketing: Inbound referrals! We've been incredibly successful placing an emphasis on quality and a fantastic customer experience, and building advocates.
Problem you would most like to solve? I'd love to find a way to more effectively diffuse the tension between sales and operations.
— Nicholas Fraher, owner.
Read AI has created software that will tell you if your meetings are boring: “The company’s first product, Read Dashboard, is a dashboard for virtual meetings that leverages artificial intelligence, computer vision and natural language processing to measure engagement, performance and sentiment among participants. ‘Read Dashboard is like Waze for meetings,’ Shim told TechCrunch. ‘We want to make collaboration easier, so it gives you analytics on how the meeting is going.’ Instead of checking each two-inch video box to read a participant’s emotions, Read provides real-time graphs and meters that show if one or more people are dominating the conversation, if people seem bored, not paying attention or if people seem happy or sad about what is being said.”
“For example, on a sales call, Read can show if what is being said is trending negatively quickly so you can either stop talking or pivot to another topic, Shim said.”
“Currently, the dashboard is available as a free service on Zoom through Google Calendar integration. It notifies attendees when it is activated and can also be removed.” READ MORE
Case study: Would movie-goers pay $25 if they got unlimited food? “For $20 during the week—$25 on weekend evenings and other peak times—adults received a movie ticket plus a wristband entitling them to unlimited popcorn, pizza, chicken tenders, soda, candy and other special menu items. Tickets for the show alone sold for $12. ‘I have wanted to redo the business model since I got into the business,’ said [Jon] Goldstein, who built his first movie theater, in Meadville, Pa.,15 years ago. ‘Without the pandemic, I might have been too busy to try this.’”
“The goal of his all-inclusive package was to drive traffic to the Woodhaven theater, which had been struggling to attract people even before it closed for 15 months during the pandemic.”
“But getting customers in the door proved challenging. On Labor Day weekend, the 1,500 tickets sold were half of Mr. Goldstein’s target, and he said the theater has lost roughly $15,000 a week since reopening in July.”
“Some customers didn’t like the new pricing concept, either. ‘If you opt for ticket only, NO CONCESSIONS allowed. Nothing to drink, or eat,’ one customer wrote on Yelp. ‘Not sure what brainiac thought that one up, but we all almost walked out.’”
“‘I take full credit for being the brainiac that thought it up,’ Mr. Goldstein said.” READ MORE
Bed Bath & Beyond blamed supply-chain issues, inflation, and a general reluctance to shop in stores for its sharp drop in sales: “The home-goods retailer’s woes come as businesses are rushing to restock pandemic-depleted inventories, and the U.S. supply chain has so far failed to adapt to a crush of imports amid mounting shipping delays and cargo backlogs. The company is also addressing internal execution issues, including how to best allocate its marketing resources to attract more shoppers, Chief Executive Mark Tritton said.”
“Challenges in the company’s operating environment were evident in key states such as Florida, Texas and California, all of which make up a substantial portion of sales, Mr. Tritton said.”
“The challenges the company faced in August haven’t abated in September, Mr. Tritton said.”
“‘One of the critical missteps’ Bed Bath & Beyond had during the quarter was cutting back key traffic drivers that had been traditionally strong, he said, as the company sought to shift customer engagement toward online and social media channels.” READ MORE
Ami Kassar says there’s no reason to hire an EIDL consultant: “We have been getting a couple of dozen requests a day from business owners asking to hire us to help them get an EIDL Loan. Of course, we gracefully decline, and so should you when someone says they are an expert and can help you get an EIDL Loan. There is no need to hire someone to help you other than possibly needing a few questions answered by your CPA.” READ MORE
At what point does it start making sense to bring manufacturing back to the U.S.? “Manufacturers looking to shift production out of China during the U.S.-China trade war piled into Vietnam, attracted by its low wages and the government’s business-friendly reputation. But strict lockdowns to contain a Covid-19 wave in the largely unvaccinated country have crippled manufacturing since July, forcing companies such as Nike and Lululemon Athletica to shift production to other countries.”
“[Nike] said it was maximizing footwear production capacity in other countries and is shifting apparel production out of Vietnam to places such as China.”
“A late August survey of nearly 100 representatives of manufacturing sector companies by the American Chamber of Commerce in Vietnam found that one fifth had already moved some production to other countries.”
“‘What people are realizing is, whether it be China or Vietnam, or whatever, you can’t have all your eggs in one basket, you can’t be vulnerable to one country from a supply-chain standpoint,’ said Jonathan Moreno, head of the Chamber’s manufacturing and supply-chain task force.” READ MORE
In the middle of a labor shortage, the government is set to let as many as 80,000 employment-based green cards expire today: “Because of a quirk in immigration law, the government began its fiscal year last October with 120,000 more green cards than the 140,000 it typically hands out, a prospect that promised to put a meaningful dent in the backlog of eligible applicants. But immigration authorities have been unable to process the windfall, exacerbating frustration felt by many of the 1.2 million immigrants—most of them from India and working in the tech sector—who have been sponsored for green cards and will continue working on temporary visas that limit their ability to change jobs or travel.”
“Congress is considering several possible legislative solutions, but they have become ensnared in broader debates on immigration occurring in both parties.”
“‘This is a self-inflicted wound, one that makes it less likely that talented people will choose to invest their skills and their futures in America,’ Jack Chen, associate general counsel at Microsoft, said.” READ MORE
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How a Black-owned coffee business went from a garage to a national brand: “While doing their market research, [Pernell] Cezar and [Rod] Johnson learned that Black Americans are distinctly under-represented in the coffee industry, as both customers and entrepreneurs. ... The company started out selling bags of home-roasted beans to independent coffee shops and retailers in the Midwest. Cezar and Johnson relied mostly on social media for marketing, and spent roughly $22,000 of their personal savings on costs like building their website and attending industry trade shows, to get their product in front of retailers.”
“Their big break — or, really, a series of them — came in 2020. First, in January, BLK & Bold’s products landed in 200 Target locations across the U.S.”
“Partnerships with Whole Foods, Midwestern grocery chain Hy-Vee and other retailers put their products — which now also include tea — in thousands of stores later that year.”
“Then, the pandemic hit. Online sales took off, especially on Amazon, where BLK & Bold featured as part of the e-commerce giant’s Black Business Accelerator last summer.” READ MORE
THE 21 HATS PODCAST
I’m a Freak About the Numbers: This week, on episode 78, Jay Goltz, Diana Lee, and Dana White talk about how they manage their financials—what reports they get, what KPIs they track, and how they make sure the sales team isn’t going rogue. We also learn of a new wrinkle in Dana’s growth plan. She’s concluded that—along with rolling out franchises and installing hair salons on military bases from Texas to Germany to Okinawa—she also needs to create her own software platform to manage her salons. “Cha-ching,” responds Jay. Plus: Diana explains how the new digital marketing privacy rules hamstring small businesses—and what they can do about it.
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If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren